Crude Oil Price Update – Flat Close after Hitting Three-Week High as US Production Ramps Up

U.S. West Texas Intermediate crude oil futures finished flat after hitting a three-week high on Tuesday as restarts at some U.S. energy plants shut by winter storms offset gains stemming from hopes of a demand recovery as China eases its COVID-19 restrictions.

On Tuesday, March WTI crude oil settled at $79.64, unchanged. The United States Oil Fund ETF (USO) closed at $69.54, up $0.22 or +0.32%.

The market was also supported by the news that Russian President Vladimir Putin signed a decree that bans the supply of oil and oil products to nations participating in the price cap from Feb. 1 for five months. Concern over a possible production cut by Russia also provided price support.

Although this is potentially bullish news, the price action suggests the news was likely priced into the market.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. However, momentum is trending higher. A trade through $83.14 will change the main trend to up. A move through $70.56 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through $73.49 will change the minor trend to down.

The main range is $89.89 to $70.56. Its retracement zone at $80.23 to $82.51 is resistance. It stopped the rally at $81.21 on Tuesday.

The minor range is $73.49 to $81.21. Its pivot at $77.35 is the nearest support. The short-term range is $70.56 to $81.21. Its 50% level at $75.89 is additional support.

Daily Swing Chart Technical Forecast

Trader reaction to the main 50% level at $80.23 is likely to determine the direction of the March WTI crude oil market early Wednesday.

Bearish Scenario

A sustained move under $80.23 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the pivots at $77.35 and $75.89.

Bullish Scenario

A sustained move over $80.23 will signal the presence of buyers. Taking out yesterday’s high at $81.21 will indicate the buying is getting stronger. This could trigger a surge into the main Fibonacci level at $82.51, followed by the main top at $83.14. The latter is a potential trigger point for an acceleration to the upside.